OPEC Worries Weak Seasonal Demand Will Hit Oil Prices

Oil prices remain vulnerable to seasonal demand weakness and high oil inventories, OPEC said Tuesday, reinforcing expectations that the group will keep output steady when it meets in March.

The Organization of Petroleum Exporting Countries kept its global oil demand forecast unchanged for 2010, however, in contrast with a recent downward revision by the International Energy Agency.

Oil prices traded below $78 a barrel Tuesday but remained comfortably at the top end of OPEC members’ preferred $70-$80 range. Although a cold snap across much of the Northern Hemisphere has helped firm up demand and boost prices, OPEC remains concerned about downward pressure on oil prices as the heating season nears its end.

“The persisting stock overhang, low seasonal demand and start of refining maintenance point to the need for continued caution over the coming months as market volatility is expected to remain,” OPEC said in its January report.

Rigzone